Ivory's approach to portfolio risk management is the foundation upon which the firm was established. This approach focuses on the management of  "spread risk." Spread risk management is defined as the active balancing of long and short positions with similar characteristics or exposures. Ivory monitors a number of different factors including market capitalization, stock liquidity, company leverage, valuations and dividend yields, among others. Ivory believes that having a thorough understanding of such characteristics within a portfolio is essential to managing portfolio risk.

To manage spread risk, Ivory has developed several proprietary systems which track more than 40 factors across the firm's portfolios as well as across proprietary indices representing the broader markets. Analyzing the two models simultaneously allows for the identification of portfolio biases relative to market trends. Once such biases and trends are identified, the portfolio manager judges which spread risks should be neutralized to mitigate portfolio risk.